Strong UK manufacturing growth boosts recovery hopes
The CIPS/Markit manufacturing purchasing managers’ index (PMI) has today revealed UK manufacturing activity grew faster than expected in February – sustaining the previous month’s 15-year high rate of growth.
The positive figures will boost hopes that the economic recovery is gathering pace after last week’s fourth quarter GDP figures were revised upwards.
Last week, the Office for National Statistics revealed the UK economy grew by 0.3% in the October to December period – slightly higher than the 0.1% estimated in January.
Meanwhile, the PMI held steady at 56.6 in February and the closely-watched index is currently at the highest level since October 1994.
The index has exceeded the crucial 50 mark, which represents growth, for five months now and February’s figure just exceeded analysts’ expectations of a level of 56.1.
The figures come after a survey by the Engineering Employers Federation (EEF) showed output returned to growth at the start of 2010 for the first time in over a year.
James Knightley, an economist at ING, comments: “This bodes well for a good first-quarter GDP figure, but we need to remember that manufacturing is still a small part of the UK economy.
“Consumer spending, which makes up around two-thirds of the economy, remains soft,” added Knightley.
Meanwhile, Rob Dobson, senior economist at Markit Economics, said: “The PMI survey suggests that the good news provided by the surge in output reported by the Office for National Statistics in December will have continued in early-2010.
“Even more encouraging are the growing signs that business-to-business and investment spending are recovering, which points to a more sustainable and broad-based recovery,” he added.